7 Project Cost Management

Key Concepts for Project Cost Management

It concerns with the cost of the resources needed to complete project activities.

It also should consider the effect of project decisions on the cost of using, maintaining, supporting the product, service, or result of the project.

Project costs can be measured in different ways and at different times. In some organizations product performance is calculated outside the project, in others - in the project scope. Is last case project will include additional processes and techniques.

Trends and Emerging Practices

Expansion of earned value management (EVM) to include the concept of earned schedule (ES).

ES is an extension of the theory and practice of EVM.

Tailoring Considerations

Considerations:

• Knowledge management. Formal knowledge management in the organization and financial database repository.
• Estimating and budgeting. Formal/Informal cost estimating/budgeting policies, procedures, guidelines.
• Earned value management.
• Use of agile approach.
• Governance. Formal/informal audit and governance policies, procedures, guidelines.

Considerations for Agile/Adaptive Environment

Frequent changes -> no sense in detail cost calculations -> lightweight estimation methods. Detailed estimates are used for short-term planning horizons.